Cardiff will join Swansea in the top flight after securing promotion from the Championship with the 0-0 draw against Charlton and victory over Burnley on Saturday would see Cardiff claim the Championship title.
Former Everton goalkeeper Southall, speaking at a Football Pools event, said: "For a Cardiff fan, for the number of times they have nearly got there, it must be the sweetest night they have had."
"It is brilliant (having two Welsh Premier League clubs), and if we can get a hat-trick with Newport or Wrexham being promoted (from the Conference) that would be even better.
"That would probably be the best season Welsh football has ever had. I can't remember a time like it.
"One (club) has been shown to have a good manager and good strategy in Swansea, and one has had some troubled times and have come through it and deserve to be in the Premier League."
Southall, who won 92 caps during a 15-year international career, believes there could ultimately be spin-offs for the Wales national team, although that might take time.
"It may have a good effect if people in Cardiff want to play, but it may have the opposite effect - people have less patience in the Premier League and want success straight away," he added.
"It would be nice if they could get some home-grown players. But I am not expecting a massive turnover, although I am sure they will buy for what they want to achieve. In fairness, if you ask a Cardiff or Swansea fan if they would rather have a good Welsh player or a super-duper foreign player, I think they would go for a super-duper foreign player.
"I think once they can build up their money - and they both do well in the community - they could make some improvement in the youth systems. I think they will do that, but in the past they have both been short of money. Hopefully, the money will go to that and they will produce their own in future."
- Sports & Recreation